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Diamond Foods Inc (NAS:DMND)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Diamond Foods Inc has an F-score of 4 indicating the company's financial situation is typical for a stable company.

DMND' s 10-Year Piotroski F-Score Range
Min: 1   Max: 8
Current: 4

1
8

During the past 14 years, the highest Piotroski F-Score of Diamond Foods Inc was 8. The lowest was 1. And the median was 4.


Definition

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Apr14) TTM:Last Year (Apr13) TTM:
Net Income was -147.062 + -42.153 + -15.06 + -105.633 = $-309.9 Mil.
Cash Flow from Operations was 0.397 + 12.837 + 48.926 + -163.682 = $-101.5 Mil.
Revenue was 199.801 + 234.668 + 220.577 + 190.892 = $845.9 Mil.
Gross Profit was 53.058 + 57.933 + 55.928 + 45.096 = $212.0 Mil.
Average Total Assets from the begining of this year (Apr13)
to the end of this year (Apr14) was
(1240.9 + 1172.315 + 1307.218 + 1228.757 + 1223.285) / 5 = $1,234.5 Mil.
Total Assets was $1,223.3 Mil.
Long-Term Debt was $638.4 Mil.
Total Current Assets was $268.1 Mil.
Total Current Liabilities was $171.5 Mil.
Net Income was -32.936 + -10.729 + 10.141 + -15.582 = $-49.1 Mil.

Revenue was 223.989 + 258.462 + 220.844 + 184.905 = $888.2 Mil.
Gross Profit was 42.264 + 58.546 + 50.569 + 43.35 = $194.7 Mil.
Average Total Assets from the begining of last year (Apr12)
to the end of last year (Apr13) was
(1375.003 + 1299.349 + 1395.733 + 1274.975 + 1240.9) / 5 = $1,317.2 Mil.
Total Assets was $1,240.9 Mil.
Long-Term Debt was $579.2 Mil.
Total Current Assets was $251.3 Mil.
Total Current Liabilities was $200.0 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Diamond Foods Inc's current net income (ttm) was -309.9. ==> Negative ==> Score 0.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Diamond Foods Inc's current cash flow from operations (ttm) was -101.5. ==> Negative ==> Score 0.

Q3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

ROA (This Year)=Net Income (TTM)/Average Total Assets from Apr13 to Apr14
=-309.908/1234.495
=-0.2510403

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Apr12 to Apr13
=-49.106/1317.192
=-0.03728082

Diamond Foods Inc's return on assets of this year was -0.2510403. Diamond Foods Inc's return on assets of last year was -0.03728082. ==> Last year is higher ==> Score 0.

Q4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA =< ROA.

Diamond Foods Inc's current net income (ttm) was -309.9. Diamond Foods Inc's current cash flow from operations (ttm) was -101.5. ==> -101.5 > -309.9 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Apr14)=Long-Term Debt/Total Assets
=638.351/1223.285
=0.52183342

Gearing (Last Year: Apr13)=Long-Term Debt/Total Assets
=579.202/1240.9
=0.46675961

Diamond Foods Inc's gearing of this year was 0.52183342. Diamond Foods Inc's gearing of last year was 0.46675961. ==> Last year is lower than this year ==> Score 0.

Q6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year'’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year: Apr14)=Total Current Assets/Total Current Liabilities
=268.118/171.515
=1.56323354

Current Ratio (Last Year: Apr13)=Total Current Assets/Total Current Liabilities
=251.269/200.008
=1.25629475

Diamond Foods Inc's current ratio of this year was 1.56323354. Diamond Foods Inc's current ratio of last year was 1.25629475. ==> This year's current ratio is higher. ==> Score 1.

Q7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Diamond Foods Inc's number of shares in issue this year was 29.1. Diamond Foods Inc's number of shares in issue last year was 21.8. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Q8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=212.015/845.938
=0.25062711

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=194.729/888.2
=0.21924004

Diamond Foods Inc's gross margin of this year was 0.25062711. Diamond Foods Inc's gross margin of last year was 0.21924004. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by average total assets throughout the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue (TTM)/Average Total Assets from Apr13 to Apr14
=845.938/1234.495
=0.68525024

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Apr12 to Apr13
=888.2/1317.192
=0.67431324

Diamond Foods Inc's asset turnover of this year was 0.68525024. Diamond Foods Inc's asset turnover of last year was 0.67431324. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=0+0+0+1+0+1+0+1+1
=4

Good or high score = 8 or 9

Bad or low score = 0 or 1

Diamond Foods Inc has an F-score of 4 indicating the company's financial situation is typical for a stable company.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities, Altman Z-Score, Beneish M-Score


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Diamond Foods Inc Annual Data

Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14
Q1 1111111000
Q2 1111101010
Q3 0011101001
Q4 0101101111
Q5 0101001001
Q6 1111001001
Q7 0000000100
Q8 0011101011
Q9 0111011100
F-score 3668528335

Diamond Foods Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Q1 0000000000
Q2 1001111100
Q3 0000000000
Q4 1111111111
Q5 0000000001
Q6 0000100011
Q7 1110000100
Q8 0001111111
Q9 1000000011
F-score 4223433440
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